RESOLUTION
APPROVING A COOPERATION AGREEMENT WITH THE HOUSING AND REDEVELOPMENT
AUTHORITY OF DULUTH, MINNESOTA EXEMPTING PUBLIC HOUSING UNITS IN
MIXED FINANCE DEVELOPMENTS FROM TAXATION AND PROVIDING FOR PILOT
PAYMENTS.

BY
COUNCILOR GILBERT:

WHEREAS, the
Housing and Redevelopment Authority of Duluth, Minnesota, (authority)
is in the process of redeveloping the Harbor View Homes neighborhood pursuant
to a fiscal year 2002 HOPE VI implementation grant in the amount of $20,000,000
(the HOPE VI grant)awarded by the United States department of housing
and urban development (HUD); and

WHEREAS, the
redevelopment will include the construction of new public housing units
(PHA units) in phases at Harbor View and at scattered sites throughout
Duluth (each a project); and

WHEREAS, the
authority intends to develop the projects in accordance with the mixed
finance method of public housing development in which the projects will
be owned by private developers but will include scattered, floating PHA
units which will be made available to authority's public housing tenants
and which will replace existing PHA units; and

WHEREAS, HUD
requires, as a condition to the authority's receipt of federal funds for
the redevelopment, that the authority enter into a cooperation agreement
providing that projects including PHA units will not pay more in taxes
or payment in lieu of taxes than a specified amount based upon a percentage
of PHA unit shelter rents; and

WHEREAS, the
authority has submitted and the city council has reviewed a HOPE VI cooperation
agreement.

BE IT RESOLVED,
that the council hereby approves and authorizes the entering into and
execution of the HOPE VI cooperation agreement by the city of Duluth.

STATEMENT
OF PURPOSE: This resolution approves entering into a cooperation
agreement with the Duluth HRA exempting public housing units (PHA units)in
mixed finance projects being developed by private individuals or entities
as a part of the Duluth HRA's redevelopment of Harbor View Homes from
real and personal property taxes and requires payments in lieu of taxation
(commonly referred to as PILOT payments). Duluth HRA's existing PHA units
are exempt from taxation and pay PILOT payments pursuant to existing cooperation
agreements.